I am glad that the British Embassy has helped to finance the research whose findings will be presented today. When the Corruption Prevention Commission (CPC) approached us a year ago looking for support for this project, we wanted to respond positively. In my remarks this morning, I would like first to explain why; second, to look at British experience, good and bad; third, to consider its possible relevance to Slovenia, with reference to competitiveness and attracting foreign investment; and fourth, to offer a view on what constitutes legitimate commentary and cooperation from outside your country.
So first, why did the UK say yes to the CPC’s request? In short, because we believe that enhancing transparency is a fundamental part of creating a stable business environment where both public and privately owned enterprises can flourish. And as Speaker of the House of Commons John Bercow said at a business breakfast two years ago hosted by the British Slovenian Chamber of Commerce: “just as you need transparency in politics, so you need transparency in economics and business”. The research you will hear more about today concentrates on the business sector, not on politics; so will I. My only comment on the politics – one which I made in a newspaper interview just before Christmas – is that the protesters in Slovenia appeared to be motivated as much by dissatisfaction with rule of law and lack of transparency in public life as by economic austerity. Transparency and accountability seem to matter more to Slovenian people now than ever before – which makes the CPC’s function a vital one. The fact that the CPC and Slovenian Chamber of Commerce are hosting today’s discussion on effects of corruption on the business environment reflects how seriously many Slovenes approach this issue.
Second, what does British experience show us? I wish I could say that the UK has all the answers, but we do not – far from it. Let me give you one bad example, and one good. The bad one is the House of Commons expenses scandal. Let me quote from that speech by John Bercow again:
Perhaps I can just say something about our approach to transparency. I do so not in the spirit of sanctimonious self-satisfaction, because we have many problems which continue to bedevil us, and there is much that we have yet to learn and to apply. So it is by way of being work in progress. We suffered reputational carnage in 2009 as a result of the expenses scandal that rocked Westminster: the exposure of an overly generous, unnecessarily secretive, inadequately accountable system of expenses for re-imbursing costs incurred by MPs. The scandal was a reflection of a failure by the House of Commons to make the necessary transition from a sort of 19th Century Gentlemen’s Club to a public institution. Every one of us in the House of Commons, including me, must share responsibility for that state of affairs. Since then, belatedly but dramatically, we have changed our procedures. We have gone for transparency wholesale. Every expense claim is out there: available to be studied, on-line, published, so that all in the media and the electorate can see what costs MPs have sought to reclaim.
To my mind, one of the finest features of this notorious episode is the effort the UK made to learn the lessons, apply them, and not be ashamed, in a spirit of transparency, to share them with others. In the UK we are continuously striving to strengthen our record on transparency and corruption in economics and business, conscious that there is room for improvement – as there is in so many of our countries. This helps me to explain my good example. For many years, the OECD criticised the UK anti-bribery legislation as insufficient. Our Anti-Bribery Act, introduced in 2010 in response to these criticisms, is now recognised as the toughest in the world. This zero-tolerance approach to bribery – a commitment to preventing British companies and officials from contributing to corrupt environments in other parts of the world – is one of the reasons why the UK has such a strong reputation as a place to do business, is home to more European HQs than any other EU Member State, and is the number one destination for foreign investment in Europe.
This brings me to my third point – the relevance of UK experience to Slovenia. Last year, the British Slovenian Chamber of Commerce hosted a breakfast purely devoted to UK experience on anti-bribery legislation, drawing on the experience of a top barrister who had helped to draft it. Soon afterwards, they hosted an event on the pivotal question of competitiveness, at which I spoke. This was just after the OECD had published its Global Competitiveness Index for 2012. Tellingly, the “most problematic factors for doing business” in Slovenia, so the OECD found, were access to financing, Government bureaucracy, labour laws and tax rates and regulations. Much lower down the list was corruption, but it was still cited by 6% of respondents. For the UK, tax and Government bureaucracy were also mentioned as problems, but corruption was cited by only 1%. So what are the factors that might lie behind this stronger UK score? My last quote from John Bercow to his Slovenian business audience:
Now you may say, as business people, what have my priorities as Speaker of the House of Commons got to do with commerce and the economy? I think that there are some analogies that can be made – and that there are a number of factors crucial to success. As a country, to attract investment and international confidence, we need strong public institutions. We need a legal and regulatory framework that is clear and predictable, preferably robust yet light touch – in other words, not off-putting to business investment or entrepreneurship. We need a respected and demonstrably independent judiciary, so that business people know that they’re dealing with a decent environment, not one prey to abuse or favouritism. And we need a free press, in a society characterized by strong civil society groups that will champion what is good and criticize impropriety and malfeasance where they see it. These are the sorts of conditions that we need to satisfy to attract investment.
Finally, I am conscious that this week is a sensitive time in Slovenia’s political calendar for us to be addressing such a hot topic as the effect of corruption on the business environment. But in my view, when the Slovenian people see the issue as so important, diplomats should not shy away from it. It is possible – indeed essential, for diplomats – to look at it analytically in a way that is politically neutral. During my four years in Slovenia, the British Embassy has worked with centre-left and centre-right Governments, and with the CPC – and we will continue to do so, whatever Slovenian Government comes to power, so long as the Government would like us to. For me, that is the key: to work with the grain of what the Government, the Parliament and institutions of the State are seeking to achieve – not in a judgemental way, but in a supportive way, learning from one another and sharing our experiences, both positive and negative. That is what I hope our Embassy, and others, will continue to do in future, in close liaison with our Chambers of Commerce and international businesses who have valuable and complementary perspectives to offer.
At a time when Slovenia is facing continued economic and rule-of-law challenges, and your politicians are considering their policy responses, I think it is a good thing that we are having an open discussion like today’s. It is also a good sign, in my view, if civil society and the media can influence the debate. Slovenes are showing that they are prepared to face up to hard questions, even if they can be painful. Foreign investors the world over know that all countries face the challenge of confronting corruption – the differences are differences of degree only, as the OECD’s work shows. Those countries that have the courage and wisdom to meet the challenge in an open way, and to show that they are tackling it, will be the most attractive to foreign investment; with that should come higher economic growth and greater public satisfaction. I hope that today’s event will send another positive signal about Slovenia’s intention to confront its difficulties and to create an environment where enterprise can blossom.